Private defence companies in India are expected to outperform public sector undertakings (PSUs) in the second quarter of fiscal 2027, with select players showing stronger execution and higher realisations, according to ICICI Securities. The brokerage projects average revenue growth of around 13% year-on-year for the defence sector in Q2 FY27, with private firms like Zen Technologies, Solar Industries India, and Azad Engineering leading the gains.
ICICI Securities’ Q2 FY27 preview highlights that while PSUs may see flat to low double-digit growth, private defence companies could report significantly higher double-digit revenue increases. Zen Technologies is forecasted to achieve a 55% year-on-year revenue rise and a 90% sequential increase in the quarter. Solar Industries India and Azad Engineering are expected to grow revenues by 52% and 30%, respectively. The brokerage notes that first-half execution has historically been weak, but order execution spillovers from the June quarter could support stronger results this time.
The expected outperformance by private defence firms comes amid steady or contracting margins for PSUs, influenced by changes in product mix and input cost pressures. This trend underscores a shift in the Indian defence sector where private players are gaining momentum through better execution and company-specific growth drivers. The mixed performance outlook for the sector reflects these dynamics, with private companies positioned to capture more growth compared to their public counterparts.
ICICI Securities’ analysis of the defence sector for Q2 FY27 provides a detailed outlook on revenue growth and margin trends, emphasizing the strong potential of private defence companies. The brokerage’s report, published ahead of the Q2 results, identifies Zen Technologies, Solar Industries India, and Azad Engineering as the top private sector performers to watch in the coming quarter.